Individual Retirement Accounts (IRAs)

What is an Individual Retirement Account (IRA)? An Individual Retirement Account, or IRA, is an investment account that allows you to save and prepare for your retirement while offering tax advantages. 

Compare Individual Retirement Accounts (IRAs)

  Traditional IRA
Roth IRA
Education IRA or Coverdell Education Savings Account
IRA Share Certificate
Who is it for? Individuals that are in a lower tax bracket at retirement that don’t qualify for a Roth, due to income level (see below income limits for Roth IRA) Individuals that are in the same or higher tax bracket after retirement and don't exceed the income limits of a Roth IRA. Designed for individuals who want to save for higher education for their children or grandchildren who are under the age of 18. No
Maximum Yearly Contributions $5,500/Year (if under age 50), $6,500 (if aged 50 and over) $11,000 for married couples filing jointly

$5,500/Year (if under age 50), $6,500 (if aged 50 and over) $11,000 for married couples filing jointly $2,000/year per, child under age 18 $5,500 Max annual contribution for single filer, $11,000 for married filing jointly
Tax deductibility for contributions Tax deferred up to 100% depending on Annual Gross Income and participation in an employer-sponsored retirement plan. Taxes are paid up-front Not tax deductible No
Taxes at withdrawal Withdrawals are taxed as income Withdrawals are tax-free (Earnings are tax free after 5 years and assuming one of the following: aged 59 1/2, disabled, death & paid to beneficiary, or first time home purchase) Withdrawals are tax-free when paying for qualified higher education fees and student is under the age of 30 90 day early penalty if individual does not return funds back to regular IRA.
Earnings Growth is tax-deferred until withdrawn Growth is tax-free Growth is tax-free No
Withdrawal restrictions Withdrawals before age 59-1/2 result in IRA penalties
Withdrawals before age 59-1/2 result in IRA penalties
No penalty when money is withdrawn to pay for qualified higher educations expenses. No
Age when withdrawal MUST be done 70-1/2 No Before beneficiary is 30 years of age No
Income Limits No Single filers must earn less than $133,000/year, Married combined income must be less than $196,000 Single filer must earn less than $95,000/year to contribute full $2,000 per child, per year. Married combined income spans between $190,000-$220,000. No
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